Start building your credit identity now

How to Build a Low Credit Score Fast

In a Nutshell: How to Build a Low Credit Score Up Fast

The first time you realize how important it is to have good credit can come as a shock. How were you supposed to know that even signing up for a cell phone plan could mean a credit check?

Lots of businesses pull your credit report as a way to see if you’re responsible enough to pay them. A landlord, for example, wants to know that you’ll make rent each month before they give you the key to an apartment. A good credit score basically tells them you’re good at paying anyone you owe money.

Whether you have a low score or no score at all, sometimes you find out you need to build up your credit score — now.

Read on to learn how to build a credit score, and what you can do to increase it a little faster.

A Beginner’s Guide to Building Your Credit Score

Before jumping in and applying for every credit card in sight, take a minute to figure out how, exactly, credit works. As we said before, your credit score shows businesses whether or not it’s a good idea to let you borrow money from them. Expect a credit inquiry (the act of pulling your credit score) if you’re applying for a:

But people who are lending you money aren’t the only ones who want to know you’ll pay them. Other businesses use your credit score to determine if you have a good payment history. A good score tells them you pay your bills each month, so they’ll feel more comfortable letting you use their services. Some companies that might look at your score include:

Factors to Your Credit Score

Think of your score like a financial grade point average. Just like a GPA, your score is a combination of several different factors. To build credit, you need to use credit responsibly so you get a good grade in each factor. Some of these credit score factors are more important than others. The biggest ones, from most important to less important, include:

  1. Payment History: Are you going to pay back the money you borrow? Are those payments going to be on time? Creditors want to know they’ll get their money back on time.
  2. Credit Utilization: How much of your available credit are you using? Are you almost at your credit limit? Using too much of your available credit could mean you’re spending too much or not good at managing your money. Aim to use 30% or less of your available credit.
  3. Age of Oldest Account: How long have you been using credit? What’s the average age of all your accounts? The longer you’ve been using credit, the more likely you know what you’re doing.
  4. New Accounts: Do you have a lot of new accounts? Have you applied for multiple accounts in a short period of time? Too many new accounts at once might make creditors think you’re using credit in place of money you don’t have.
  5. Types of Accounts: Do you have a mix of different accounts, like a credit card and a car loan? Businesses like to see different types of accounts to show you can handle different types of credit. This has a smaller effect on your score. Don’t bother opening accounts for the sake of mixing it up — this is more likely to hurt than help.

How Do I Build a Credit Score Fast with a Credit Card?

A lot of people are taught one thing about credit cards: Stay far away. It’s definitely easy to overspend and get in over your head using a card. Yet, credit cards are also one of the best ways to build credit fast.

As long as you’re smart about using your card, a credit card could help you build credit in about six months.

One good way to stay safe with a credit card is to use it as a debit card: Only pay with your card if you have the cash in your account to cover the purchase. You should also pay your bill on time each month and avoid hitting your credit limit to keep your credit utilization low.

How Do I Build a Credit Score Fast Without a Credit Card?

Credit cards are a go-to for building credit fast, but they’re not the only option. The easiest way to build credit fast without a credit card is to get a loan. Installment loans, like a car loan, have a set monthly payment and interest rate. As you make payments, your loan balance decreases. Regular loan payments should increase your credit score.

However, your chances of getting approved for a loan without credit might be low. You also shouldn’t take on a big debt like a loan just because you want to build credit. Instead, look at loan alternatives, like:

How to Build a Credit Score Fast When You Have Bad or Low Credit

Unfortunately, it’s sometimes easy to get off to a rough start with credit. Whether you overspend on a credit card or get in over your head with a loan, having a low credit score might seem difficult to improve. But just like building credit from scratch, you can increase a bad credit score by using your credit wisely.

A good option to increase a low credit score fast is to use a secured credit card. Secured cards work like a normal credit card, but your chances for approval are higher because you’ll make a refundable cash deposit.

Secured cards usually work like this:

How to Build Credit Fast When You Have No Credit

Starting to build credit from scratch? Luckily, there are a lot of good ways to build a credit history. Two of the most common options are to use a credit builder loan or secured credit card. Both are relatively safe ways to get started with credit.

If you know someone who has good credit and is willing to let you use it, like your parents, you could also try the following options.

Tips to Build Your Credit Score Fast

Once you have access to credit, you can start building your score. Good credit scores take time, but you can give it a little boost using these tips: